To manage through supply chain turbulence, the maker of automated driving systems and EV wiring is leaning on a central “supply chain resiliency team” that monitors information from up to 4,000 suppliers. It has built a virtual, digital twin of its global supply chain to anticipate problems, and launched 100 projects to redesign products so they are not vulnerable to a shutdown by a single supplier, Clark said.
Aptiv began a more focused effort to identify its suppliers and create a digital map of its supply chain three or four years ago in response to global trade tensions, Clark said in an interview.
‘Brute force’
Earlier this year, the company’s supply chain crisis teams and technology were tested when a winter storm shut down petrochemical production in Texas.
“We apply a lot of brute force” to solving supply disruptions, Clark said.
Aptiv receives more than 2 million parts every day from 4,000 suppliers, he said. Those components go to 125 Aptiv factories that in turn ship parts to more than 5,000 customer locations. Sensors and scanners allow Aptiv to monitor activity through its production system.
To head off future supply chain shocks, semiconductor manufacturers want auto manufacturers to share longer-term production plans, and stick to production volume commitments.
“Predictability of production is extremely important,” Clark told analysts, adding that Aptiv plans to have “deeper relationships” with fewer key semiconductor suppliers.
Looking ahead to 2022, Clark said there remained a lot of uncertainty, despite signs of stabilization in semiconductor production. An upsurge in COVID-19, bad weather or a natural disaster could have an outsized impact, he said. “There’s no extra inventory in the system.”
Aptiv posted net income of $86 million, or 32 cents per share, for the quarter, from $283 million, or $1.05 per share, a year earlier.
Excluding items, the company reported a profit of 38 cents per share, marginally above analyst expectations of 37 cents per share. Net sales fell marginally to $3.65 billion, above estimates of $3.50 billion, according to Refinitiv data.
Aptiv shares were essentially unchanged in afternoon trading on Thursday.
